Moody's may downgrade Hilton Hotels on Hilton Group buy

GabrielMadway

SAN FRANCISCO (MarketWatch) -- Moody's Investors Service on Thursday placed Hilton Hotels Corp.'s
HLT, +1.26%
on review for possible downgrade following the company's announcement that it has agreed to acquire the lodging assets of Hilton Group Plc
uk:hg
for $5.71 billion. The agency said the review will focus on market position, diversification, profitability, cash flow, leverage, financial policy and liquidity. Hilton Hotels will improve its ranking on several of these factors, but pro-forma leverage will increase to above 5.0x, which is outside the appropriate range for the current rating, Moody's said. Therefore, a key rating consideration will be the company's ability to reduce debt within a reasonable time frame.

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